Spain prepares for a partial payment of the fourth tranche of Next Generation funds

At the beginning of March, the Minister of Economy, Carlos Body, did not rule out receiving a partial payment of the fourth tranche of Next Generation funds. The unemployment benefit reform was pending and the evaluation period available to the European Commission was ending. Although, a few days later, Brussels and the Government announced in Madrid a two-month extension of the analysis period, it seems that Spain is now prepares for a partial payment to be executed.

As reported Bloomberghe The most likely scenario is that the Government and the European Commission agree to a partial payment, since there would not be time to carry out the unemployment benefit reform in this period of two additional months. A period in which, in addition, difficult support would have to be added in Congress for the approval of the measure.

“A possible partial disbursement has not yet been considered,” The Minister of Economy, Carlos Body, denied to the press after being asked about this news at the end of the meeting of EU Economy and Finance Ministers (Ecofin) in Luxembourg. The reform, he has indicated, is “positive” for labor reform and, “once it is carried out, it will entail the disbursement of funds.”

Body has added the sequence to follow, which it had already explained on previous occasions: the Government works “in parallel, with the Commission, on the one hand, to advance the positive evaluation of more than 60 milestones and objectives of the fourth disbursement. And on domestic level, because we know that one of the pending milestones is the unemployment benefit reform.

Spain sent to Brussels the request for the fourth payment of the Recovery Plan, endowed with 10,021 million euros, a few days before Christmas. Taking into account this holiday period, the European Commission and Spain agreed to extend the evaluation of the fourth payment for one more month, until March 19. A few days before the deadline expired, the Government and the European Commission agreed to extend the evaluation period for this disbursement two monthsuntil mid-May.

The objective of the extension of the deadline was to be able to technically adapt some milestones and objectives in order to speed up the analysis of the Community Executive. But such an extension granted a certain margin, although very fair, to comply with the unemployment benefit reformwhich did not achieve validation in the Congress of Deputies in January, with Podemos voting against.

Of proceed to a partial payment, Spain would have six more months to carry out the unemployment benefit reform and access the pending provision. The milestone, as contained in the Recovery Plan, requires your “entry into force” to make payment. For practical purposes it implies that it must be in progress, not just approved.

The amount that will be subtracted from the total of 10 billion euros in the event of a partial disbursement will be determined by the European Commission. In this calculation, Brussels takes into account whether It is a step to start or finish a reform and if it is one of the specific recommendations that the Community Executive makes to this country.